Is there no line drawn before incompetence is deemed illegal. eg misuse of funds, or deliberately bankrupting a public company? Surely at some point it becomes a crime?? Agreed if it his private company and at worst staff get laid off, but this is a public company. ASIC is there to protect the interests of shareholders for that very reason, because the directors won't always act in shareholders' interests.
Say, Joe Blogs is the CEO of a company. All the other directors have resigned and he has had enough of all the disgruntled shareholders. Is it "completely legal" for him to buy 3 chickens from a "guy" for $5 million? He was just incompetent -the guy told him they laid golden eggs, turns out they didn't.
Or is it "completely legal" to lend $5 million to another company (of a mate or one he part owns), but accidentally forgot to check if they would have the capacity to pay back a cent. Then resigns.
Or to bet the last $5 million of the company's money on a horse and lose the lot. He thought he was acting in the companies interests, but just picked a dud horse.
A social club organiser can't even borrow $5 from the drinks kitty and temporaily place it his own bank account ("to earn interest on it") without committing a crime. Sure the company can sack him, but he still committed a crime and could go before a court.
But a CEO of a publicly listed company can do ANYTHING he chooses with millions of dollars of shareholders money without doing anything illegal.
Maybe you're right, Tim. How scary if you are.
CVI Price at posting:
0.9¢ Sentiment: None Disclosure: Held
